The Burj Dubai Project: A Symbol of Economic Strength or a Monument to Hubris?
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Case Code: PROM007 Case Length: 19 Pages Period: 2003-2010 Pub Date: 2010 Teaching Note: Not Available |
Price: Rs.300 Organization: Emaar Properties PJSC Industry: Construction and Real Estate Countries: Dubai Themes: Project Management, Project Environment |
Abstract Case Intro 1 Excerpts
Excerpts
The Rationale for the Project
In 1971, Dubai joined Abu Dhabi and four other Persian Gulf states - Sharjah, Ajman, Umm al-Quwain, and Fujaira - to form the UAE. Ras al-Khimah too soon joined the group. Over the years, the UAE became a prosperous state on the back of oil revenues and also due to the fact that it was situated on one of the main waterways of the Middle East...
The Design of the Burj Dubai
Emaar, founded in 1997, was one of the largest real estate companies in the world as of 2009 and the Middle East's largest home builder by market capitalization. The company was 31.88% owned by the Dubai government and also had foreign investors...
Other Project Features
The Burj Dubai was to be the centerpiece of 'Downtown Burj Dubai'; an urban project spread over two square kilometers. 'Downtown Burj Dubai', included the Dubai Mall (to be the largest shopping mall in the world), nine hotels, 19 residential towers, 30,000 homes, an entertainment complex, 6.2 acres of parkland, and a 30-acre manmade lake, with one of the biggest fountains in the world...
The Economic Details
Emaar announced that the total budget for the Burj Dubai was US$ 4.1 billion , while the budget for Downtown Burj Dubai was US$ 20 billion. George Efstathiou (Efstathiou), Managing Partner of SOM, said, "I've seen a lot of clients dreaming of building a supertall. Not many come to fruition, because you really have to know what you're doing...
Construction
In early 2004, bids were invited from major global contractors for constructing the Burj Dubai Tower. The US$ 871 million contract was finally awarded to a JV formed by Samsung, BESIX, and Arabtec...
Delays During Construction
In 2006, the project, which had till then been progressing slightly ahead of schedule, fell behind schedule. Workers from countries like India, Pakistan, and Bangladesh, were used to construct the towers and they complained that they were being paid very low wages...
Making Progress
Even as its construction met with delays, the tower continued breaking height related records regularly. In February 2007, Burj Dubai overtook the Sears Tower located in Chicago, US, for being the building with the most floors, after 100 floors were built...
Changes in the Dubai Real Estate Market
In late 2008, the world economic crisis, combined with a slump in the price of crude oil and a fall in world trade, had an adverse impact on the real estate market in Dubai. Consequently, real estate prices plunged, and there was a steep fall in the demand for homes and offices...
Project Completion
Emaar was also affected by the downturn in the real estate market in Dubai. In late 2008, the price of property at Burj Dubai slumped by about 50%-60%, while prices in the surrounding Downtown Burj Dubai fell by at least 22%...
Exhibits
Exhibit I: A Picture of the Burj Khalifa
Exhibit II: About Skidmore, Owings & Merrill (SOM)
Exhibit III: About Samsung, Besix and Arabtec
Exhibit IV: Some Major Structures in Dubai
Exhibit V: A Comparison of Burj Dubai's Floor Plan with Some Other Structures
Exhibit VI: Information about Burj Dubai
Exhibit VII: Sub-Contractors for the Project
Exhibit VIII: Comparison of Burj Dubai with Other Prominent Towers
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